AFL-CIO President Richard Trumka speaks after he and other progressive and labor leaders met with President Obama to discuss immigration reform at the White House in Washington Tuesday.

Kevin Lamarque/Reuters

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Washington — When a bipartisan gang of senators unveiled its immigration-reform proposals in January, tucked in near the end was a short sentence with sweeping ambition: “allow more lower-skilled immigrants to come here when our economy is creating jobs, and fewer when our economy is not creating jobs.”

Within that simple-sounding statement lies the revolutionary possibility of a “smart” immigration system for foreign workers – a fluctuating stream of international labor that would be a stark departure from the United States' current approach of smacking strict (and largely arbitrary) quotas on employment-based immigration.

While a market-driven system for temporary workers is a goal shared by America’s largest labor unions (like the AFL-CIO) and corporate interests embodied by the Chamber of Commerce, the two sides appear to differ sharply on the details.

That means that crafting one of the most ambitious policy proposals in the current immigration-reform debate could unravel the entire program by busting the ongoing partnership between labor and management, two of immigration reform’s key outside players.

In 2011, the US admitted more than 2 million temporary workers, a figure that swells to more than 3 million when the workers’ families are included, according to the Department of Homeland Security. Roughly half of those, ranging from seasonal agricultural workers to nurses to electrical engineers, could be governed by a new flexible visa regime.

The number of temporary workers are now set predominantly by quotas that bump along at stable rates from year to year no matter the economic condition in the US. Critics of the current system say that this leaves worker shortages when the economy is surging and allows too many workers to enter the country when economic activity slackens.

Visa caps for temporary worker programs “don’t apply to reality,” says Shawn McBurney, a senior lobbyist with the American Hotel and Lodging Association. “The number of guest workers allowed in the country should be determined by the need of the economy and that really can’t be set by an arbitrary number.”

Labor officials also scowl at current temporary-worker programs because they believe the current system gives employers incentives to “cut corners” on worker rights and “cut wages” versus those paid to American workers, says Ms. DiBetetto.

Both sides largely agree that the system of legal immigration that took hold after the last round of comprehensive immigration reform in 1986 was dysfunctional and helped sow the seeds of today’s problem of illegal immigration.

“A mistake of the 1986 Act was that it did not provide for legal immigration at all skill levels, which would allow employers to fill the vacancies that they encounter after trying to recruit US workers,” said Randy Johnson, a senior vice president at the Chamber of Commerce who specializes in immigration issues, in an e-mailed statement. “Therefore these jobs went unfilled through legal programs and they became attractive to immigrants outside the country who came illegally to fill those jobs.”

While both labor and management aim to claim the mantle of having such “market-driven” solutions to these inequities, how the two sides would get to such a system diverge sharply.

Let corporations set the number of foreign workers they need, these advocates argue.

The Immigration Innovation Act, a bipartisan measure led by Sens. Orrin Hatch (R) of Utah and Amy Klobuchar (D) of Minnesota, shows how a system like this might work. The so-called "I-Squared Act" would, in part, allow visas for highly skilled workers (known as H1-Bs) to rise from the current 65,000 level to as many as 300,000 under one condition – corporate demand for such visas.

Alternatively, the government could hold a certain number of visas constant every year in each profession and allow companies to bid for visas beyond the regular allotment, suggests Rob Atkinson, president of the Information Technology and Innovation Foundation.

In that way, “the visas that would provide the highest value to the economy – certainly the highest value to the firm – would be the ones that would be getting the preference,” Mr. Atkinson says.

In addition, such an auction could help raise money to invest in American STEM (science, technology, engineering, and math) education, Atkinson points out.

How labor sees it

Liberal labor economists see such schemes as “really ridiculous,” says Ross Eisenbrey of the Economic Policy Institute. He and other like-minded economists don’t believe that current safeguards on the H1-B program – requiring corporations to attempt to hire Americans – are sufficient. As such, the schemes simply allow companies to substitute cheaper foreign labor for American.

Instead, labor leaders like the AFl-CIO’s president, Richard Trumka, point to a “data-driven” system of temporary workers overseen by a government commission.

For example, a Foreign Worker Adjustment Commission proposed in a 2009 paper by Ray Marshall, an economist and former secretary of Labor in the Carter administration, would oversee all the country’s employment-based immigration programs, from low-skilled seasonal labor to high-skilled technology workers.

The FWAC, composed of presidential appointees confirmed by Congress and the heads of cabinet departments with a role in immigration (like State and Homeland Security), would study labor-market conditions throughout the nation and adjust various visas based on occupational, industrial, and regional worker shortages.

When the commission offers a recommendation, Congress would have to explicitly reject the finding within one year or the president could implement the finding unilaterally.

The benefit, says Mr. Eisenbrey, is such a system “would force Congress, instead of endlessly stirring the pot and fighting with each other, to do something or face the consequences.”

The problem? Even Mr. Williams, the concept’s creator, conceded in his report that a lack of accurate and timely data “is a valid concern.”

Even with incisive data, there’s the question of how even the most well-intentioned bureaucracy gets a good read on the nation’s employment situation. Would such a commission be replacing one arbitrary visa number with another more expensive, more complex but, in the end, equally arbitrary number?

It’s a policy difference with a significant political bite. In the last fight over comprehensive immigration reform in the mid-2000s, the AFL-CIO abandoned support for such a bill because of deep opposition to the proposed guest-worker program.

To date, the AFL-CIO's Mr. Trumka and Chamber of Commerce chief Tom Donohue have been getting along splendidly, according to their public pronouncements, with Mr. Donohue saying an accord between the two groups “should speed the process” of getting to an immigration-reform deal.

But a rift between the two, analysts and advocates say, could have a powerful effect to the legislation’s detriment.